Smith+Nephew Launches $500 Million Buyback as Q1 Revenue Rises to $1.5 Billion

Smith+Nephew announced a new $500 million share buyback on May 6 as it reported first-quarter 2026 revenue of $1,501 million, up from $1,407 million a year earlier, in its first-quarter trading update. The company kept its full-year guidance unchanged.

Underlying revenue growth was 3.1% and reported growth was 6.6%, including a 350 basis point tailwind from foreign exchange. The quarter, which ended March 28, had 61 trading days, one fewer than a year earlier; adjusted for that, underlying growth was 4.7%, the company said. The update was also filed with the US Securities and Exchange Commission on Form 6-K.

Sports medicine up, US knees down

The company said growth came from all business units and regions, with strength in Sports Medicine offsetting weakness in US knee implants. "For the first time, Sports Medicine is now larger than Orthopaedic Reconstruction and Robotics," said the company's CEO, Deepak Nath, in the update.

US knee implant revenue fell 10.3% on both an underlying and reported basis. Smith+Nephew attributed the decline to deliberate trade-offs to balance growth, profit and asset efficiency ahead of the launch of its LANDMARK knee system, with a cementless version expected in the third quarter of 2026. Hip implants grew 5.8%, and knee implants outside the US grew 6.0% on an underlying basis.

In Advanced Wound Management, the company said its skin substitute business saw a small underlying revenue decline because of a reimbursement reset in 2026, which it said is reducing both volumes and pricing in non-surgical settings.

The company also named Nathan Folkert as President, Orthopaedics, replacing Craig Gaffin, who is leaving to pursue a new opportunity. Folkert, who will join later in May, has most recently been CEO of Orchid Orthopedic Solutions and previously held senior roles at Stryker, Conmed and Zimmer.

Buyback and guidance

The $500 million buyback is to be completed within the next 12 months and will be financed from free cash flow and existing cash balances. Together with expected ordinary dividends, Smith+Nephew said it would return more than $835 million to shareholders over the next 12 months, equivalent to 6.3% of its market capitalisation based on the closing price on May 1. The company completed a previous $500 million buyback in 2025.

For 2026, Smith+Nephew still expects underlying revenue growth of around 6%, organic trading profit growth of around 8%, trading profit of around $1.3 billion including the acquisition of Integrity Orthopaedics, and about $800 million of free cash flow. It expects an impact of around $60 million from tariffs and an incremental $20 million to $40 million from the skin substitute reimbursement reset.

"As previously noted, revenue growth in 2026 will be weighted towards the second half of the year, driven by the ramp up of our exciting product launches, stabilisation in US skin substitutes and an improving trajectory in US knees," Nath said.